£1.3m in compensation awarded last year by financial ombudsman

Douglas Melville. Picture: DAVID FERGUSON. (38212516)

COMPLAINTS to the Channel Islands Financial Ombudsman rose by 12% last year to 562, with more than £1.3 million awarded in compensation, the organisation’s latest annual report shows.

And last year’s increase – following a larger one of 85 in 2022 – means that the landmark of 500 annual complaints has been reached for two years running, as the ombudsman has highlighted customer service as an issue for financial-services providers.

“It is often heard that the standard of customer service offered by some businesses and bureaucracies has declined post-Covid,” the report says. “Our general experience of some local financial-services complaint-handling is no different. Complainants frequently tell us their concerns are not being treated as complaints by financial-services providers. This means [they] sacrifice customer goodwill when an early resolution would retain customer confidence and consume less complaint-handling resources,” the report says.

Once challenged by the ombudsman, some providers were also routinely missing the 14-day deadline for a response, with the average time taken to reply some 31 days.

The ombudsman, who is accountable to the States of Jersey and Guernsey, found in favour of complainants in almost half the 342 cases closed during the year.

Of new cases relating to Jersey last year, the vast majority – 139 of 162 – related to banking complaints, with dissatisfaction over current accounts attracting most attention. In Guernsey, the number of insurance businesses meant that the bulk of its complaints came in that sector.

As fraud and scams also rise, the ombudsman also noticed a rise in banking complaints where accounts were blocked due to suspected fraudulent activity. Bank account closures were also prevalent, arising where customers were not locally resident or where a change in the bank’s risk appetite had occurred. However, in some cases, banks were simply not providing a reason to their customers for closing their accounts, the ombudsman said.

Commenting on the year’s work, principal ombudsman and chief executive Douglas Melville said: “Despite [the] pressures, the combined efforts of our Jersey-based team and experienced contracted resources from the UK managed to maintain case file inventory levels within the desired target range for work in progress, ensuring no resurgence of a case backlog.”

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